Being a consultant and investor I am facing a very genuine question these days by almost 90% of the investors I meet and that question is "I missed the rally, should I buy stocks now?" Well the feeling of being left out is very painful sometimes even more than loosing money on stocks. The straight forward answer I give them, without citing too much of reasons, is a big No. The reasons are many and cannot be explained verbally in couple of minutes. So I decided to pen them down in this post.
1. FIIs continue to put money while DIIs continue to pull. FIIs were net buyers to the tune of around 20,000 crore while DIIs were net sellers to the tune of 8500 crore in the month of September alone. FII money are short term money and driven by global factors which could start reversing in case of any bad global economic news and then there will be no buyers to support the selling pressure till it reaches an attractive level where DIIs start putting money backs into the markets.The Indian stock markets have become purely FII driven market since last few months which is not a very sound situation for our markets.